Michael Hudson: Trump’s Trade Threats are really Cold War 2.0

Naked Capitalism has published the article Michael Hudson: Trump’s Trade Threats are really Cold War 2.0

Trump’s trade tantrum is that other countries are simply following the same economic strategy that once made America great, but which neoliberals have destroyed here and in much of Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its competitive industrial advantage and become a high-cost rentier economy. Its GDP is “empty,” consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and capital gains while the nation’s infrastructure decays and its labor is reduced to a prat-time “gig” economy. Under these conditions the effect of trade threats can only be to speed up the drive by other countries to become economically self-reliant.

If Trump could get what he wished, we could take control of China’s economy. China’s only logical reaction is to try harder to protect itself from the possibility of having to succumb to such coercion. There is a reason why China has been willing to take our money and just leave it in the bank while selling us goods cheaply. USA money in the bank is the safeguard against USA economic threats.

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